Thailand Business News — Morning Briefing

Wednesday, 4 November 2026 | Thailand, ASEAN and Global Markets

Today’s briefing examines Thailand’s automotive tax restructuring, Japan’s semiconductor industry consolidation, Hong Kong’s stronger-than-expected economic growth, China’s latest financial-market intervention and Grab’s improving profitability across Southeast Asia.

Thailand raises imported EV excise taxes to 35% to protect domestic automotive manufacturing

Thailand’s cabinet has approved a substantial increase in excise taxes on fully imported electric vehicles, raising the rate for battery-electric vehicles (BEVs) from 10% to 35% and for range-extended electric vehicles (REEVs) from 15% to 35%, effective 1 January 2027. The measure represents a significant shift in Thailand’s EV strategy, moving from incentives designed to accelerate consumer adoption towards stronger protection of domestic manufacturing, local employment and automotive supply chains. Thailand Business News: Thailand to Raise Imported EV Taxes to 35% in Push to Protect Local Production.

Key points

• Excise taxes on fully imported BEVs and REEVs will increase to 35% from January 2027.
• Thailand’s EV ecosystem has attracted approximately US$4.59 billion in investment approvals across 189 projects as of August 2026.
• Electric, hybrid and plug-in hybrid vehicles accounted for 55% of new vehicle registrations during the first seven months of 2026.

Finance Minister Ekniti Nitithanprapas said the changes aim to preserve Thailand’s position as a regional automotive production and export hub. The government is concerned that inexpensive imported vehicles, particularly from Chinese manufacturers, could undermine domestic production and put pressure on established automotive suppliers. The revised tax structure is intended to encourage manufacturers to move from importing finished vehicles towards assembling vehicles and sourcing components locally.

The policy is particularly significant for Chinese manufacturers that have invested in Thailand, including BYD and Great Wall Motor. Both companies have established local manufacturing operations, while other international manufacturers are developing production capacity in the Eastern Economic Corridor. The government has also instructed the Excise Department to negotiate incentive packages for investors establishing or expanding manufacturing facilities.

The new policy builds on an investment programme that has already transformed Thailand’s automotive landscape. Thailand Business News previously examined the scale of the transformation in its report on Thailand’s US$4.1 billion EV investment pipeline across 198 projects. The broader regional implications were also explored in Southeast Asia’s intensifying EV manufacturing race.

However, the higher tax rate could increase prices for imported EV models without local manufacturing operations, potentially reducing consumer choice and slowing some segments of EV adoption. The effectiveness of the policy will depend on whether manufacturers respond with additional investment rather than simply withdrawing products from the Thai market.

Why it matters: Thailand is attempting to ensure that the EV transition generates domestic industrial value rather than relying predominantly on imported vehicles. The policy could strengthen local suppliers and employment, but its success will depend on attracting genuine manufacturing investment while maintaining competitive consumer prices.

Japan considers US$8.2 billion semiconductor materials deal as AI investment drives industry consolidation

Japan Investment Corporation (JIC), the state-backed investment fund, is planning to sell semiconductor materials manufacturer JSR to Mitsui Chemicals in a transaction potentially exceeding 1.3 trillion yen (approximately US$8.2 billion), according to people familiar with the discussions cited by Reuters on Wednesday, 4 November. The proposed acquisition could become one of Japan’s largest chemical-sector transactions and represents another major step in the consolidation of its strategic semiconductor supply chain. Thailand Business News: Japan coverage.

Key points

• The proposed transaction could exceed 1.3 trillion yen, equivalent to approximately US$8.2 billion.
• JSR was acquired by JIC for approximately 900 billion yen two years ago.
• JSR’s photoresist technology is strategically important for advanced semiconductor manufacturing, including increasingly sophisticated chip-production processes.

Founded in 1957, JSR is a leading manufacturer of photoresists, specialised chemicals used to transfer circuit patterns onto semiconductor wafers. These materials are essential to advanced chip manufacturing, particularly as manufacturers develop smaller process nodes and more sophisticated computing technologies. Demand for semiconductor materials has increased alongside investment in AI processors, high-performance computing and advanced memory production.

JIC originally acquired JSR to promote consolidation in Japan’s semiconductor materials industry and strengthen its international competitiveness. The proposed sale to Mitsui Chemicals suggests that the state-backed fund is now seeking to realise the value created by rising semiconductor-sector valuations. Mitsui is already expanding its presence in advanced chip materials, making the acquisition strategically attractive, although the financial commitment would be substantial.

Financing is likely to be one of the central challenges. Mitsui Chemicals had approximately 217.8 billion yen in cash and cash equivalents and 876.4 billion yen in interest-bearing debt at the end of June. Its market capitalisation was approximately 800 billion yen, substantially below the potential acquisition price. Mitsui’s shares fell sharply following the report, reflecting investor concerns about the financing structure and balance-sheet implications. No final agreement has been announced, and the companies have not publicly confirmed the transaction.

The development reinforces Japan’s wider strategy of strengthening advanced manufacturing. Thailand Business News previously examined the growing industrial relationship between the two countries in its report on Thailand and Japan’s US$11.72 billion industrial partnership covering semiconductors, EVs and clean energy. The latest transaction illustrates why semiconductor materials and specialised industrial capabilities are becoming increasingly important in regional investment strategies.

The proposed acquisition highlights the growing strategic value of semiconductor materials and the importance of industrial consolidation in advanced technology sectors. For Thailand, closer integration with Japanese semiconductor suppliers could create opportunities in electronics manufacturing, specialised chemicals and higher-value industrial production.

Hong Kong’s economy grows 5.2% in third quarter as exports and AI demand strengthen recovery

Hong Kong’s economy expanded by 5.2% year on year in the third quarter of 2026, significantly exceeding economists’ expectations of 3.6% and accelerating from 4.2% growth in the previous quarter. The advance GDP estimate, published on Tuesday, 3 November, represents the city’s 15th consecutive quarter of economic expansion, supported by strong merchandise exports, domestic demand and continued investment linked to artificial intelligence. Thailand Business News: Hong Kong coverage.

Key points

• Real GDP increased 5.2% year on year and 1.9% quarter on quarter in the third quarter.
• Merchandise exports surged 30.4%, while imports increased 29.9%.
• Private consumption expanded 2.8%, while cumulative GDP growth for the first nine months reached 5.1%, the strongest comparable performance in five years.

The export sector remains the strongest contributor to Hong Kong’s current economic momentum. Goods exports accelerated from 28.9% growth in the second quarter to 30.4% in the third quarter. The expansion reflects resilient international trade and demand for electronics and technology products associated with global AI infrastructure investment. Imports also increased strongly, indicating substantial trade activity and demand for goods used in production and consumption. Reuters

Domestic demand remains supportive, although household consumption is showing some moderation. Private consumption expenditure increased 2.8% year on year, compared with 2.9% in the second quarter and 4.9% in the first. The government expects services exports to benefit from international tourism, cross-border travel and financial-market activity, reinforcing Hong Kong’s position as an important international financial and commercial centre.

The results build on an economic recovery that has increasingly relied on trade, tourism and financial services. Thailand Business News explored the longer-term challenges in its analysis of Hong Kong’s next economic challenge beyond recovery. Its earlier report on Hong Kong’s return to the top global IPO market position also highlighted the city’s importance as a gateway for international investment and Chinese corporate financing.

Nevertheless, policymakers remain cautious about the outlook. Geopolitical tensions in the Middle East, elevated energy costs and tighter monetary conditions among major central banks could weaken international demand and increase financing costs. The strength of the current expansion will therefore depend partly on whether global technology investment and financial-market activity remain resilient.

Why it matters: Hong Kong’s performance demonstrates the strength of Asian trade and technology-related demand despite geopolitical uncertainty. Its expansion provides an important indicator of regional economic resilience and highlights the continuing importance of international financial centres to Asian investment flows.

China’s central bank expands stock-market support as share-buying loan applications exceed US$30 billion

The People’s Bank of China (PBOC) announced on Wednesday, 4 November, that applications from banks for its central-bank-backed stock-purchase lending programme had exceeded 200 billion yuan (approximately US$30 billion). The central bank is expanding support for corporate share buybacks and share acquisitions, while lowering the applicable relending interest rate to 1% from 1.25%, in an effort to improve market liquidity and restore investor confidence following October’s sharp equity-market decline. Thailand Business News: China coverage.

Key points

• Applications for the stock-purchase lending programme have exceeded 200 billion yuan, equivalent to approximately US$30 billion.
• The PBOC reduced the relending rate by 0.25 percentage points to 1%, effective 4 November.
• The initiative aims to accelerate corporate share buybacks, increase market capitalisation and support stability in China’s equity markets.

The programme enables eligible banks to obtain central-bank funding at preferential rates and provide financing to companies and major shareholders for share purchases and buybacks. By lowering the cost of borrowing, the PBOC hopes to encourage faster disbursement and increase demand for listed shares. The initiative forms part of Beijing’s broader efforts to stabilise financial markets following a period of considerable volatility.

The intervention follows an 8.5% decline in the CSI 300 index during October, its worst monthly performance in more than a decade. Investor concerns include weak domestic consumption, the prolonged property-sector downturn and questions about the sustainability of valuations in technology companies. Regulators have also encouraged listed companies to undertake buybacks and strengthen their commitment to shareholder returns.

However, the authorities are simultaneously considering restrictions on new equity supply. Reuters reported on Tuesday, citing a Financial Times report, that securities regulators had informally instructed investment banks to pause IPOs and temporarily suspend large share sales by existing shareholders until market conditions improve. Reuters said it could not independently verify the reported guidance, and Chinese regulators had not publicly confirmed such an instruction. The reported measure highlights the tension between supporting existing listed companies and maintaining access to equity financing for new businesses. Reuters

This intervention builds on Beijing’s earlier attempts to support capital-market liquidity. Thailand Business News previously covered the PBOC’s original 500 billion yuan funding initiative to bolster China’s capital markets, introduced in October 2024. The latest measures indicate that market stabilisation remains an important policy priority, even as regulators seek to balance financial support with longer-term market development.

Why it matters: China’s ability to stabilise its equity markets has implications for regional investment sentiment, corporate financing and international capital flows. The latest measures may provide short-term support, but sustainable recovery will require stronger corporate earnings and improved confidence in the broader Chinese economy.

Grab raises 2026 financial outlook as revenue grows 27% and financial services turn profitable

Grab Holdings reported third-quarter 2026 revenue of US$1.112 billion, an increase of 27% year on year, and raised its full-year revenue and adjusted EBITDA forecasts. The Singapore-based platform operator also achieved positive adjusted EBITDA in its financial services division for the first time, marking an important milestone in its transition from a ride-hailing and delivery business towards a broader digital financial-services ecosystem. Thailand Business News: ASEAN coverage.

Key points

• Third-quarter revenue increased 27% to US$1.112 billion, while adjusted EBITDA rose 73% to a record US$237 million.
• Grab raised its 2026 revenue forecast to US$4.15–4.20 billion and its adjusted EBITDA outlook to US$790–800 million.
• Financial services achieved positive adjusted EBITDA of US$12 million for the first time, while monthly transacting users reached a record 57 million.

The latest results demonstrate stronger operating leverage across Grab’s core businesses. Delivery revenue increased 21% to US$561 million, supported by food and grocery transactions and improving advertising monetisation. Mobility and delivery gross merchandise value increased 18% to US$6.8 billion, reflecting greater activity across the platform. Adjusted EBITDA margins also improved, indicating that revenue growth is increasingly translating into stronger operating profitability.

Financial services is emerging as an increasingly important growth engine. Revenue in the division increased 124% year on year to US$201 million, while the gross loan portfolio reached US$2.7 billion. Total loans disbursed during the quarter increased 115% to US$1.9 billion. The division recorded positive adjusted EBITDA of US$12 million, compared with a loss of US$28 million a year earlier.

The expansion also introduces credit risks that investors will need to monitor. Non-performing loans, measured as balances more than 90 days overdue, represented 2.6% of the gross loan portfolio, while expected credit-loss reserves covered these loans approximately 2.4 times. The rapid expansion of lending makes credit quality, underwriting standards and funding costs increasingly important to the company’s longer-term profitability.

The company also faces a setback in its regional expansion strategy. Taiwan’s competition regulator rejected Grab’s proposed acquisition of Delivery Hero’s foodpanda Taiwan business, triggering a US$60 million break fee that will be recorded in the fourth quarter. Grab said the charge will be excluded from its adjusted EBITDA guidance. The decision illustrates the regulatory obstacles facing digital platforms seeking further consolidation across Asian markets.

Thailand Business News previously examined the economic significance of the platform in its analysis of Grab’s contribution to Thailand’s GDP and employment. The wider commercial opportunity was also explored in its report on ASEAN’s trillion-dollar digital economy and e-commerce growth engine.

Why it matters: Grab’s results provide evidence that Southeast Asia’s digital-platform businesses can move towards sustained profitability while expanding financial services. Its growing lending operations also highlight the importance of credit quality and responsible financing as digital ecosystems become increasingly integrated into regional economies.

Editorial outlook

Three broader developments emerge from today’s news:

• Industrial policy is becoming more interventionist: Thailand’s EV tax restructuring and Japan’s semiconductor consolidation illustrate how governments are using fiscal and industrial policies to strengthen strategic manufacturing sectors.
• Asia’s financial markets remain dependent on policy support: China’s latest interventions demonstrate the difficulty of restoring investor confidence when economic fundamentals remain uncertain.
• The digital economy is moving towards profitability: Grab’s results show that regional technology platforms are increasingly generating operating earnings from diversified services, particularly financial technology.

For Thailand, the central challenge remains converting foreign investment, export growth and industrial restructuring into sustainable domestic value creation, stronger employment and higher productivity.